Title Insurance Problems - Conflicts of Interest?
REM # A615
By Ilyce R. Glink
Summary: A title insurance professional comments on title insurance problems and why they happen. Problems may stem from conflicts of interest in which real estate agencies also own a mortgage company and a title company but don't disclose the relationship.
Several weeks ago, I ran a letter from a real estate agent who has been having difficulties with her title company. The letter writer was frustrated with the number of mistakes being made, including HUD-1 statements being delivered late and riddled with errors, property taxes not credited correctly, and good faith estimates being off by hundreds or thousands of dollars. I suggested that the real estate “gold rush” of the past few years has seen thousands of newcomers flock to the field. The letter has generated a number of thoughtful responses. Here is one of them.
Q: I am involved in a locally-owned and operated title insurance company in Cape Coral/Ft. Myers, Florida.
Your comments regarding the talent level of experienced professionals in the business being "watered down" because of the real estate "gold rush" is right on target.
In addition, many real estate agents and brokers are now operating in the gray area by participating in "affilated business arrangements." In other words, in addition to owning and operating a real estate agency, they also own a mortgage company and a title company.
Plus, most of these relationships are not disclosed to the consumer and borders on RESPA violations. Until the regulators crack down on these types of operations, the consumer will suffer with poor service and very limited experience.
When real estate professionals stray from their "core business" they tend to do nothing professionally.
The comment the letter writer made about receiving HUD-1 to review 48 hours prior to close is interesting. In the title business, we are always operating in a "crisis" mode because lenders do not provide their numbers or packages until the day of closing. In the lender’s defense, they have experienced the same talent issues that we have in the title insurance business.
Consumers should always seek and find the most qualified professional, whether it is a real estate agent, mortgage broker or banker, and title company. Price should be considered only if the client is willing to put up with delays and errors.
A: Thanks for a look at the other side. I agree that consumers should seek highly-qualified professionals. But within those top professionals, you can find quite a variety of pricing.
The pros I’ve used have offered very fair pricing, and outstanding service, so consumers should look for both. Going with the cheapest professional, without looking at the service record, could set the table for a rough closing.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
Quit-Claim Deed Question
Quit Claim Deed Transfers Property Taxes
Deed in Lieu of Foreclosure Will Hurt Credit Rating
Selling Your House When Your Child Lives There
Buying a House with Your Mother-In-Law
Link to This Article
Like what you've read? Spread the word! You can link to this article
from your website by copying the following code and adding it to
a page on your website:
Copyright ©2001-2007. ThinkGlink, Inc.
All rights reserved. Reproduction of material from any www.ThinkGlink.com pages without permission is strictly prohibited.
Site designed by Walker Sands Communications
